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Island Economy Delivers Mixed Message on Tourism During Uncertain Season

Blame it on terrorism, the stock market tumble or the fine weather that kept tourists on their beach blankets and away from downtown shops. Whatever the reason, it's been a lackluster summer at the cash register for most, but not all, Island businesses.

What's frustrated shopkeepers more than anything is that the tourists appeared to come in large numbers this summer - but were simply less likely to open their wallets.

"We have the people," said Valerie Richards, executive director of the Martha's Vineyard Chamber of Commerce. "But we're not sure they're spending much of their discretionary income."

According to the latest statistics from the Steamship Authority, passenger and car traffic to the Island topped last year by a margin of about two per cent. At Martha's Vineyard Airport, manager Bill Weibrecht reports that fuel sales are up this summer, indicating an increase in private and charter jet traffic to the Vineyard.

Those reports seem to bolster the feeling most Islanders have when they're stuck in traffic at one of the many Island bottlenecks - that the Vineyard is overrun by visitors.

But there are also mixed signals coming from the front lines of the Vineyard summer economy.

The summer rental market, for instance, was strong in August but down slightly in July. "August was as good as any August," said Judy Federowicz, owner of Landmarks Real Estate in Vineyard Haven. "But July was definitely off this year."

In fact, vacancies in July forced some property owners to lower prices in an effort to entice renters, she added. Tourists also seemed to be making more last-minute travel plans, Mrs. Federowicz said.

At least one shop owner noticed things weren't quite right after Independence Day: "There was a lull in July when there shouldn't have been a lull," said John Stevenson, owner of Cycle Works in Vineyard Haven. "I looked out my store window and suddenly there's no automobiles going by."

But even worse than a perceived lull in the stream of tourists was the impression that tourists were in a guarded mood, worried about the national economy or troubled by the aftermath of Sept. 11.

"These are cautious times we all are in," said Ann Nelson, owner of Bunch of Grapes bookstore in Vineyard Haven. "We don't have security in our jobs or in our country. It's a whole different ballgame."

Mr. Stevenson noticed a similar attitude dampening sales. "People are holding a little closer, staying at home in light of the stock market and the terrorist thing," he said.

But discord on a national scale is only part of the picture illustrating the summer economy. There were also Island factors.

Paul Watts, regional vice president of Compass Bank, said some tourists may suffer a case of sticker shock when they encounter the steep prices for goods and services all over the Island. Commercial rents, he said, are putting the squeeze on store owners, helping to escalate prices charged to consumers.

"We have all pushed the envelope, and people need to pull back from that," said Mr. Watts. Tourists are looking at destinations around the world where they will get the "most bang for the buck," he added.

Mr. Stevenson agreed, saying that Island businesses run the risk of pricing themselves right out of the summer tourist market.

"People are complaining that everything costs too much," he said. "It's very similar to what I heard before the bust that went on in the eighties. There's going to be a shift coming very soon."

Some businesses are already feeling the chill. Said one building contractor, who asked not to be named, "Most of my clients are in the financial sector. They're hurting pups. They used to throw money around like crazy. Now they're questioning things."

That attitude could be contributing to a slowdown in the Island construction industry. Steamship figures show a one per cent drop in truck traffic to the Island so far this year.

But over at Bunch of Grapes, the sticking point hasn't been price tags. It was the weather, combined with the lack of blockbuster book titles.

"A bookseller loves a rainy day. Rain brings people off the beach," said Ms. Nelson. "And I've not had a John Adams or a Harry Potter this year."

Plus, she said, Tisbury businesses continue to reel from the absence of the former landmark hotel at the head of Main street.

"No doubt, we're feeling the impact of the closure of the Tisbury Inn and the health club, not to mention the fact that one is not as enticed to come downtown if the entry looks like a construction zone," said Ms. Nelson.

Elsewhere on the business front, the summer report card is a real mix. One art gallery owner said sales were down at most galleries: "I'm hearing everybody's having a slow summer," she said. "Customers would come in and say ‘We wanted to stop in and say hello, but we're not buying this summer.'"

But at Dragonfly Gallery in Oak Bluffs, owner Holly Alaimo said art sales have outpaced last summer's. "More people are nesting," she said. "And because more people are nesting, they're buying art."

Greer Boyle, co-owner of Atria, an upscale restaurant in Edgartown, said, "Our numbers are up 30 per cent over last year."

But she pointed out that with the high overhead in real estate costs, she's putting most of that money right back into the business. "On this Island, it's hard to meet your debts," she said. "I've heard that some people are having a hard time."

A slow summer could break some businesses. "You will see some vacancies in the business districts," said Mr. Watts. "At the end of the season, some business owners will be scratching their heads and saying, ‘All this and I made 20 grand?'"

"It was a tough season for a lot of people," said Dennis DaRosa, co-owner of DaRosa's Martha's Vineyard Printing Co. and president of the Oak Bluffs Association.

"Retailers seem to be not so happy," said Renee Balter, executive director of the association. "They're hoping the fall will do well for them."